Late payment is becoming one of the biggest hidden strains on SMEs in a UK economy still under cost pressure.

Cashflow gaps are continuing to widen, putting increasing pressure on day-to-day operations and growth.

SMEs Are Now Owed £66,770 on Average

New data shows SMEs are currently owed an average of £66,770 in unpaid invoices, up 10% year on year. Around a third have also written off close to £30,000 in the past year due to customer insolvency or non-payment.

This is no longer an occasional issue. It is becoming a consistent cashflow drag that directly affects hiring, investment, and day-to-day stability.

Payment Delays Are Becoming the Norm

62% of SMEs say clients are taking longer to pay than they did a year ago. At the same time, 19% say they have had to delay payments to their own suppliers to manage cashflow pressures.

That creates a chain reaction across supply networks, where pressure is pushed down to smaller businesses with the least room to absorb it. For most SMEs, this is less about choice and more about managing delays coming from larger customers.

Government figures estimate late payment costs the UK economy £11 billion a year, with 38 businesses closing every day as a result and SMEs spending around 86 hours annually chasing invoices. Despite this, SMEs continue to absorb much of the impact, often acting as the buffer within wider supply chains.

Cashflow Pressure Is Forcing Smarter Financial Decisions

Research from Bibby Financial Services highlights that many firms are actively managing liquidity more tightly in response to ongoing uncertainty.

Derek Ryan, CEO for North West Europe, notes that while late payment is a long-standing issue, the rise in bad debt is more concerning. These are losses that are never recovered, forcing businesses to adjust pricing and operations to compensate.

Policy Is Starting to Respond

The UK government is tightening its stance, giving more power to the Small Business Commissioner and proposing a 60-day cap on payment terms for large firms, alongside mandatory interest on late payments.

The direction is clear: late payment is moving from a business practice issue to a regulated compliance area.

What It Means for SMEs

The issue is not just how much is owed, but when it is paid. Even profitable SMEs can come under pressure when payments are delayed, creating a mismatch between outgoing costs and incoming revenue.

As delays become more common, stronger cashflow management is becoming a competitive advantage rather than just an operational necessity.

The Opportunity for SMEs and Suppliers

Late payment may be a growing challenge, but it is also creating clear demand for better solutions. From cashflow management and finance to credit control and automation, SMEs are actively looking for ways to protect revenue and improve resilience.

For suppliers, this presents a strong opportunity to position services that directly solve one of the most pressing issues facing SMEs today.

For SMEs, it is about finding the right partners who can support faster payments, stronger financial control, and more predictable cashflow.

Where This Comes Together

These conversations are already happening in the spaces where SMEs and solution providers connect in real terms.

At The Business Show, businesses are not just discussing challenges like late payments, they are actively looking for the tools, services, and partnerships that solve them.

For suppliers, it is a chance to get in front of decision-makers dealing with this issue right now.

For SMEs, it is an opportunity to find practical solutions that can immediately improve cashflow and stability.

The shift towards stronger cashflow control is already underway.